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RMECC purchased a 5-percent interest in CBA, represented by
6,392 class A shares and 238,000 class B shares, on December 27,
1968, from TCH.
As of December 31, 1968, RMECC owned 334,121 class A shares
and 3,500,000 class B shares of CBA. These shares represented a
95.9-percent voting interest and an 83-percent interest by value.
As of December 31, 1968, RMECC had a capital surplus of
$34,290,413.47 and retained earnings of $692,457.82.
In 1968, RMECC issued $50 million of 5-percent Subordinated
Guaranteed Convertible Debentures Due 1988 (the debentures) in
the European market. The debentures were bearer bonds in
denominations of $1,000, with interest coupons attached. The
debentures bore interest from June 1, 1968, which was payable
semi-annually on June 1 and December 1 each year. They were
dated June 1, 1968, and matured on June 1, 1988.
RMECC sold the debentures to underwriters Dillon, Read &
Co., S. G. Warburg & Co., Ltd., and Reynolds & Co., who agreed
not to sell, directly or indirectly, any of the debentures to any
citizen, resident, partnership, corporation, or any other entity
located in the United States or its territories or possessions.
The legend on the face of the debentures states:
The issuer of this Debenture has been formed or
availed of for the principal purpose of obtaining funds
(directly or indirectly) for foreign issuers or foreign
obligors. Consequently, the United States Internal
Revenue Service has ruled that United States persons
(as that term is defined in Section 4920(a)(4) of the
United States Internal Revenue Code of 1954) will be
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